What to do with some spare cash

[dodo]

22 yr Mortgage 135K , ,
CU 7K over 4 yrs at 200E a mth ,
CC 2K
So what best to pay of with 19K, thanks

 

[ClubMan]

As ever - rank the loans in descending order of interest rate and start at the top. Most likely the CC first, then the CU loan then the mortgage.

 

[dodo]

As ever - rank the loans in descending order of interest rate and start at the top. Most likely the CC first, then the CU loan then the mortgage.

? if the mortgage is over 22 yrs and CU is 4 yrs even though higher % but less years ,would you not pay more interest over the 22 yr rathar than the 4 years, ie if amount 7K spare do you save more if you pay of total CU or the 7K of the mortgage. Cant fully understand the way it works

 

[ClubMan]

You can estimate the interest cost savings of putting a chunk off your mortgage using Karl Jeacle's mortgage calculator and then compare that to dealing with the other loans. I still think that you'd generally be better off dealing with high cost unsecured loans first. Then any erstwhile loan/credit repayments could always also be used to accelerate repayment of the mortgage.

 

[LDFerguson]

Then any erstwhile loan/credit repayments could always also be used to accelerate repayment of the mortgage.

Agree totally with this - pay off your Credit Card and Credit Union AND then increase your mortgage repayments by €200 per month PLUS whatever you were paying each month on the Credit Card.

 

[dodo]

Agree totally with this - pay off your Credit Card and Credit Union AND then increase your mortgage repayments by €200 per month PLUS whatever you were paying each month on the Credit Card.

Does it make a differece whether I pay off 200E extra a month or should I reduce the mortgage term to refleck the extra 200E a month,if you het my meaning

 

[ClubMan]

You can maximise your savings by making lump sum and/or regular accelerated capital repayments (agree these in writing with your lender to avoid any confusion) while fixing your repayments at a level above their normal/scheduled level (the excess constituting a a regular capital repayment) until further notice and thereby reducing the effective term and cost of the mortgage. In most or all cases you should not have to reschedule the loan term explicitly. Did you use the calculator that I mentioned above to see the effects on total cost of different accelerated capital repayment strategies?